What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-02-05 compared with 2024-02-07 · 310 added, 256 removed, 452 unchanged (56% of the section changed)

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Risks and Uncertainties

Global economic challenges, including geopolitical events, international hostilities, acts of terrorism, public health crises, high and sustained inflation in countries that comprise our major markets, high interest rates, and labor and supply chain issues could cause economic uncertainty and volatility.

Global economic disruptions, including geopolitical events, international hostilities, acts of terrorism, public health crises, inflation or stagflation, tariffs and other trade barriers, central bank interest rate policies in countries that comprise our major markets and labor and supply chain challenges could cause economic uncertainty and volatility.

The impact of these issues on our business will vary by geographic market and discipline.

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In response to reductions in revenue, we can take actions to align our cost structure with changes in client demand and manage our working capital.

there can be no assurance as to the effectiveness of our efforts to mitigate any impact of the current and future adverse economic conditions, reductions in client revenue, changes in client creditworthiness and other developments.

We are a strategic holding company providing advertising, marketing and corporate communications services to many of the largest global companies.

However, there can be no assurance as to the effectiveness of our efforts to mitigate any impact of the current and future adverse economic conditions, reductions in client revenue, changes in client creditworthiness and other developments.

Agreement to Acquire IPG

On December 8, 2024, we entered into the Merger Agreement with IPG.

Upon closing, each share of IPG common stock will be exchanged for 0.344 shares of Omnicom common stock.

The closing of the Merger is subject to the satisfaction of customary closing conditions, including receipt of required regulatory approvals and approval by Omnicom stockholders and IPG stockholders.

If completed, the Merger is expected to have a material impact on our business, results of operations and financial condition.

For additional information, see Item 1, “Business - Agreement to Acquire IPG.

We are a strategic holding company providing data-inspired, creative marketing and sales solutions to many of the largest global companies.

Our portfolio of companies includes our global networks, BBDO, DDB, TBWA, Omnicom Media Group, the DAS Group of Companies, and the Communications Consultancy Network.

All our global networks integrate their service offerings with the Omnicom branded practice areas, including Omnicom Health Group, Omnicom Precision Marketing Group, Omnicom Commerce Group, Omnicom Advertising Collective, Omnicom Public Relations Group, and Omnicom Brand Consulting Group, as well as our Experiential businesses and Execution & Support businesses, which includes Omnicom Specialty Marketing Group.

As described in Note 5 to the consolidated financial statements, on January 2, 2024, we acquired Flywheel Digital, the digital commerce business of Ascential plc, for a net cash purchase price of approximately $845 million.

Flywheel Digital provides services in e-commerce operations, media execution, and market intelligence.

These services are complemented by a technology platform, which provides near real-time insights to clients.

We expect Flywheel Digital to be a separate practice area within Omnicom, and we expect to integrate their services across our Advertising & Media, Precision Marketing and Commerce & Branding disciplines.

All of our global networks integrate their service offerings with the Omnicom branded practice areas, including Omnicom Health Group, Omnicom Precision Marketing Group, Omnicom Commerce Group, Omnicom Advertising Collective, Omnicom Public Relations Group, Omnicom Brand Consulting Group, Flywheel Digital and Omnicom Production, a practice area that brings together Omnicom’s global production capabilities, as well as our Experiential businesses and Execution & Support businesses, which includes Omnicom Specialty Marketing Group.

In August 2024, we announced the formation of Omnicom Advertising Group, or OAG, a new global organization that aligns the world-class creative networks BBDO, DDB and TBWA, as well as leading agencies within the Omnicom Advertising Collective.

OAG began operations in January 2025.

In January 2024 , we acquired Flywheel Digital, the digital commerce business of Ascential plc, for a net cash purchase price of approximately $845 million .

On a global, pan-regional, and local basis, our networks, practice areas and agencies provide a comprehensive range of services in the following fundamental disciplines:

Advertising & Media, Precision Marketing, Commerce & Branding, Experiential, Execution & Support, Public Relations, and Healthcare.

Advertising & Media includes creative services across digital and traditional media, strategic media planning and buying, performance media, and data analytics services.

Precision Marketing includes digital and direct marketing, digital transformation consulting and data and analytics.

Commerce & Branding services include brand and product consulting, strategy and research, retail, and e-commerce.

Experiential marketing services include live and digital events and experience design and execution.

Execution & Support includes field marketing, digital and physical merchandising, point-of-sale, product placement, as well as other specialized marketing and custom communications services.

Public Relations services include corporate communications, crisis management, public affairs, and media and media relations services.

Media & Advertising, Precision Marketing, Public Relations, Healthcare, Branding & Retail Commerce, Experiential, and Execution & Support.

Media & Advertising includes creative services across digital and traditional media, strategic media planning and buying, performance media, data analytics services, and Omnicom Production.

Precision Marketing includes digital and direct marketing, digital transformation consulting, e-commerce operations, media execution, market intelligence and data and analytics.

Public Relations services include corporate communications, crisis

management, public affairs and media and media relations services.

Healthcare includes corporate communications and advertising and media services to global healthcare and pharmaceutical companies.

Our geographic markets include the Americas, which includes North America and Latin America, Europe, the Middle East and Africa (EMEA), and Asia-Pacific.

Branding & Retail Commerce services include brand and product consulting, strategy and research and retail marketing.

Experiential marketing services include live and digital events and experience design and execution.

Execution & Support includes field marketing, sales support, digital and physical merchandising, point-of-sale and product placement, as well as other specialized marketing and custom communications services.

We operate in all major markets and have a large client base.

Our geographic markets include the Americas, which includes North America and Latin America, Europe, EMEA, and Asia-Pacific.

Our business model was built and continues to evolve around our clients.

While our networks, practice areas and agencies operate under different names and frame their ideas in different disciplines, we organize our services around our clients.

Our fundamental business principle is that our clients’ specific marketing requirements are the central focus of how we structure our service offerings and allocate our resources.

Our fundamental business principle is that our clients’ specific requirements are the central focus of how we structure our service offerings and allocate our resources.

This client-centric business model requires that multiple agencies within Omnicom collaborate in formal and informal virtual client networks utilizing our key client matrix organization structure.

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We use our client-centric approach to grow our business by expanding our service offerings to existing clients, moving into new markets and obtaining new clients.

In addition, we pursue selective acquisitions of complementary companies with strong entrepreneurial management teams that currently serve or could serve our existing clients.

In addition, we pursue selective acquisitions of complementary companies with strong entrepreneurial management teams that could fill gaps in our service delivery to our existing clients.

We believe generative AI will have a significant effect on how we provide services to our clients and how we enhance the productivity of our people.

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The rapidly developing nature of AI technology makes it difficult to assess the full impact on our business at this time.

As a leading global advertising, marketing and corporate communications company, we operate in all major markets and have a large client base.

We operate in all major markets and have a large client base.

For the year ended December 31, 2024, our largest client represented 2.7% of revenue, and our 100 largest clients, which represent many of the world's major marketers, represented approximately 54% of revenue.

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Global economic conditions have a direct impact on our business and financial performance.

Adverse global economic conditions pose a risk that our clients may reduce, postpone or cancel spending on advertising, marketing and corporate communications services, which would reduce the demand for our services.

Revenue is typically lower in the first and third quarters a nd higher i n the second and fourth quarters, reflecting client spending patterns during the year and additional project work that usually occurs in the fourth quarter.

Adverse global economic conditions pose a risk that our clients may reduce, postpone or cancel spending on marketing and communications services, which would reduce the demand for our services.

Revenue is typically lower in the first and third quarters and higher in the second and fourth quarters, reflecting client spending patterns during the year and additional project work that usually occurs in the fourth quarter.

Certain global events targeted by major marketers for advertising expenditures, such as the FIFA World Cup and the Olympics, and certain national events, such as the U.S.

election process, may affect our revenue period-over-period in certain businesses.

election process, may affect our revenue year-over-year in certain businesses.

Typically, these events do not have a significant impact on our revenue in any period.

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We analyze revenue growth by reviewing the components and mix of the growth, including growth by principal regional market, practice area and marketing discipline, the impact from foreign currency exchange rate changes, growth from acquisitions, net of dispositions, and growth from our largest clients.

Operating expenses are analyzed in the following categories:

cost of services, selling, general and administrative expenses, or SG&A, and depreciation and amortization.

Operating expenses primarily consist of cost of services, selling, general and administrative expenses, or SG&A, and depreciation and amortization, and are analyzed for each network by the chief operating decision maker, who allocates resources accordingly.

Financial Performance

Worldwide revenue in 2023 increased to $14,692.2 million compared to $14,289.1 million in 2022.

Worldwide organic growth increased revenue $584.5 million, or 4.1%.

Changes in foreign exchange rates reduced revenue $28.3 million, or 0.2%, and acquisition revenue, net of disposition revenue, reduced revenue $153.1 million, or 1.1%.

The negative impact on revenue from acquisitions, net of dispositions, period to period was primarily due to dispositions in the Execution & Support discipline in the first and second quarters of 2023, including the sale of our research businesses, as well as the disposition of our businesses in Russia in the first quarter of 2022, partially offset by acquisitions in our Advertising & Media and Public Relations disciplines during the year.

The changes in worldwide revenue across our principal regional markets were:

North America increased $95.0 million, Europe increased $256.4 million, Asia-Pacific increased $31.0 million and Latin America increased $57.8 million.

In North America for 2023 compared to the prior year period, increased organic revenue was driven primarily by the performance in the United States, especially in the Advertising & Media discipline, led by our media business, and our Precision Marketing, and Healthcare disciplines, partially offset by negative performance in our Experiential and Commerce & Branding disciplines, which faced difficult comparisons to the prior year, and our Execution & Support discipline.

In Europe, organic revenue for 2023 increased compared to 2022 across most countries of our major markets and in substantially all disciplines, especially our Advertising & Media discipline, led by our media business, and our Experiential discipline, partially offset by a decrease in our Public Relations discipline.

Foreign currency changes increased revenue for 2023, primarily as a result of the strengthening of the Euro and British Pound against the U.S.

Dollar period to period.

In Latin America, organic revenue for 2023 increased in all of our disciplines, led by our Advertising & Media discipline, and in substantially all countries in the region.

The strengthening of most currencies, especially the Mexican Peso and Brazilian Real, partially offset by the weakening of the Argentine Peso against the U.S.

Dollar, increased revenue in 2023 compared to 2022.

In Asia-Pacific, organic revenue for 2023 increased compared to 2022 across most major markets in the region, especially China, India, Australia, and Japan, and was led by our media business in our Advertising & Media discipline and our Experiential discipline.

The organic revenue growth was partially offset by the weakening of certain foreign currencies against the U.S.

Dollar period to period, especially the Australian Dollar, Japanese Yen, and Chinese Renminbi.

The changes in worldwide revenue in 2023, compared to 2022, in our fundamental disciplines were:

Advertising & Media increased $457.3 million, Precision Marketing increased $46.9 million, Commerce & Branding increased $5.6 million, Experiential increased $15.8 million, Execution & Support decreased $189.1 million, Public Relations increased $26.2 million, and Healthcare increased $40.4 million.

A summary of our full year consolidated results of operations period-over-period is as follows:

Worldwide revenue in 2024 increased $996.9 million, or 6.8%, to $15.7 billion compared to $14.7 billion in 2023.

Worldwide organic growth (defined below) increased revenue $768.7 million, or 5.2%, reflecting increased client spending in our Media & Advertising, Precision Marketing, Experiential and Public Relations disciplines and in all of our major geographic markets compared to the prior year.

Our Public Relations discipline was helped by spending on the U.S.

elections, and the Experiential discipline benefited from spending on the Summer Olympics.

Changes in foreign exchange rates reduced revenue $65.5 million, or 0.4%, and acquisition revenue, net of disposition revenue, increased revenue $293.7 million, or 2.0% (see Note 5 and 14 to the consolidated financial statements).

In North America, organic revenue growth in 2024 compared to the prior year was primarily driven by strong performance in the United States, especially in the Media & Advertising discipline, led by our media business, and our Precision Marketing, Experiential, and Public Relations disciplines.

Our Public Relations discipline was helped by spending on the U.S.

elections, and the Experiential discipline benefited from spending on the Summer Olympics.

The organic growth was partially offset by underperformance in our Branding & Retail Commerce, Execution & Support and Healthcare disciplines.

Acquisitions, net of dispositions, positively impacted revenue and were primarily related to the purchase of Flywheel Digital in January 2024 and

acquisitions in the second half of 2023 in our Public Relations discipline, partially offset by dispositions in the Execution & Support discipline in the first half of 2023.

In Europe, organic revenue growth in 2024 compared to the prior year was driven by strong performance in our Media & Advertising discipline, led by our media business, and in our Experiential and Execution & Support disciplines, partially offset by underperformance in our Precision Marketing, Branding & Retail Commerce and Public Relations disciplines.

Foreign currency exchange rate changes increased revenue year-over-year, primarily as a result of the strengthening of the British Pound, partially offset by the weakening of several currencies against the U.S.

Dollar year-over-year.

Acquisitions, net of dispositions for 2024, positively impacted revenue and were primarily related to the purchase of Flywheel Digital in January 2024 and acquisition activity in our Media & Advertising discipline in the second half of 2023, partially offset by dispositions in the Execution & Support discipline in the first half of 2023.

In Latin America, organic revenue growth in 2024 compared to the prior year, increased in all disciplines, led by Media & Advertising, and in all countries in the region.

The weakening of most currencies against the U.S.

Dollar decreased revenue in 2024, compared to 2023.

Acquisitions positively impacted revenue and were primarily related to acquisition activity in our Media & Advertising discipline in the prior year and the purchase of Flywheel Digital in January 2024.

In Asia-Pacific, during 2024, organic revenue increased compared to 2023.

Organic growth in our Media & Advertising discipline was partially offset by underperformance in our Precision Marketing and Public Relations disciplines.

Substantially all markets in the region, especially China, India, Australia, the Philippines and Thailand, had positive organic revenue growth as compared to the prior year.

Foreign currency changes decreased revenue for the year, primarily as a result of the weakening of the Japanese Yen and Chinese Reminbi against the U.S.

Acquisition activity, including the purchase of Flywheel Digital in January 2024, increased revenue compared to the prior year.

The year-over-year changes in worldwide revenue in 2024, compared to 2023, in our fundamental disciplines were:

Media & Advertising increased $575.0 million, Precision Marketing increased $347.4 million, Public Relations increased $100.3 million, Healthcare decreased $8.0 million, Branding & Retail Commerce decreased $60.8 million, Experiential increased $80.1 million and Execution & Support decreased $37.1 million.

The increases in worldwide revenue across our principal regional markets were:

North America $699.2 million, Europe $172.1 million, Asia-Pacific $69.1 million and Latin America $46.9 million.

A summary of our consolidated results of operations year-over-year:

2024 2023 $ Change % Change

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14.5 % 14.3 % 0.2 %

Interest expense, net $ 111.8 $ 137.9 $ (26.1) (18.9) %

Net Income - Omnicom Group Inc.

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1) Reconciliation of Non-GAAP Financial Measures on page 30 .

2) For the year ended December 31, 2023, operating expenses included real estate operating lease impairment charges, severance, and other exit costs of $191.5 million ($145.5 million after tax) related to repositioning actions we took in the first and second quarters of 2023 to reduce our real estate requirements, rebalance our workforce, and consolidate operations in certain markets (see Note 13 to the consolidated financial

In addition, in the second quarter of 2023, we recorded a gain of $78.8 million ($55.9 million after tax) on disposition of certain of our research businesses in the Execution & Support discipline (see Note 14 to the consolidated financial statements).

Included in the fourth quarter of 2023 within selling, general and administrative expenses are acquisition transaction costs of $14.5 million, primarily related to the purchase of Flywheel Digital in January 2024 (see Note 5 to the consolidated financial statements).

The net aggregate impact of these items on Operating Income for the year ended December 31, 2023 was a reduction of $127.2 million ($102.6 million after tax).

The net aggregate effect of these items for the year ended December 31, 2023 to diluted net income per share - Omnicom Group Inc.

was a decrease of $0.50 (see Notes 13 and 14 to the consolidated financial statements).

3) For December 31, 2022, operating expenses included $113.4 million of charges recorded in the first quarter of 2022, as well as an additional net income tax charge of $4.8 million, related to the disposition of our businesses in Russia, which reduced net income - Omnicom Group Inc.

by $118.2 million and diluted net income per share - Omnicom Group Inc.

by $0.57 (see Note 15 to the consolidated financial statements).

2) In 2024, operating expenses included $57.8 million ($42.9 million after-tax) of repositioning costs, primarily related to severance, recorded in the second quarter of 2024 (see Note 13 to the consolidated financial statements).

Included in selling, general and administrative expenses in the fourth quarter of 2024 are acquisition transaction costs of $14.6 million ($13.1 million after-tax), related to the proposed merger with IPG (see Note 1 to the consolidated financial statements).

The net impact of these items reduced operating income for 2024 by $72.4 million ($56.0 million after-tax) and reduced diluted net income per share - Omnicom Group Inc.

In 2023, operating expenses included real estate operating lease impairment charges, severance and other exit costs of $191.5 million ($145.5 million after-tax) related to repositioning actions we took in the first and second quarters of 2023 to reduce our real estate requirements, rebalance our workforce, and consolidate operations in certain markets.

In addition, in the second quarter of 2023, we recorded a gain of $78.8 million ($55.9 million after-tax) on the disposition of certain of our research businesses in the Execution & Support discipline.

Included in the fourth quarter of 2023 within selling, general and administrative expenses are acquisition transaction costs of $14.5 million ($13.0 million after-tax), primarily related to the purchase of Flywheel Digital in January 2024 (see Note 5 to the consolidated financial statements).

The net impact of these items reduced operating income for 2023 by $127.2 million ($102.6 million after-tax) and reduced diluted net income per share - Omnicom Group Inc.

by $0.50 (see Notes 13 and 14 to the consolidated financial statements).

3) Beginning in 2024, EBITA is defined as earnings before interest, income taxes and amortization of acquired intangible assets and internally developed strategic platform assets.

As a result, we reclassified the prior year to be consistent with the revised definition, which reduced EBITA from previously reported amounts.

We believe EBITA is useful in evaluating the impact of amortization of acquired intangible assets and internally developed strategic platform assets on operating performance and allows for comparability between reporting periods, the after-tax impact on diluted net income per share- Omnicom Group Inc.

for 2024 and 2023 was $0.32 and $0.23, respectively.

CRITICAL ACCOUNTING ESTIMATES

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The evaluation of potential acquisitions is based on various factors, including specialized know-how, reputation, geographic coverage, competitive position and service offerings of the target businesses, as well as our experience and judgment.

Our acquisition strategy is focused on acquiring the expertise of an assembled workforce, and in some cases their associated technological capabilities and assets, in order to continue to build upon the core capabilities of our various strategic business platforms and agency brands through the expansion of their geographic reach or their service capabilities to better serve our clients.

Our acquisition strategy is focused on acquiring the expertise of an assembled workforce in order to continue to build upon the core capabilities of our various strategic business platforms and agency brands through the expansion of their geographic reach or their service capabilities to better serve our clients.

Additional key factors we consider include the competitive position and specialized know-how of the acquisition targets.

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In valuing these identified intangible assets, we typically use an income approach and consider comparable market participant measurements.

In 2023, to better align with our internal financial processes, the date of our annual impairment test was changed from June 30 to May 1.

We will continue to evaluate goodwill for impairment at least annually at May 1 and whenever events or circumstances indicate the carrying value may not be recoverable.

We evaluate goodwill for impairment at least annually at May 1 and whenever events or circumstances indicate the carrying value may not be recoverable.

Under FASB ASC Topic 350, Intangibles - Goodwill and Other , we have the option of either assessing qualitative factors to determine whether it is more-likely-than-not that the carrying value of our reporting units exceeds their respective fair value (Step 0) or proceeding directly to the quantitative goodwill impairment test.

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(1) the expected long-term growth rate of our reporting units' cash flows and (2) the weighted average cost of capital (“WACC”) for each reporting unit.

The assumptions used for the long-term growth rate and WACC in our evaluations:

May 1, 2023 June 30, 2022

The long-term growth rate and WACC assumptions used in our evaluations:

May 1, 2024 May 1, 2023

Long-Term Growth Rate 3.5% 3.5%

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We considered this history when determining the long-term growth rates used in our annual impairment test at May 1, 2024.

Included in the 10-year history are the full year 2020 results that reflected the negative impact of the COVID-19 pandemic on the global economy and our revenue.

We believe marketing expenditures over the long term have a high correlation to NGDP.

Based on our past performance, we also believe that our growth rate can exceed NGDP growth in the short-term, notwithstanding the current inflationary environment, in the markets we operate in, which are similar across our reporting units.

Included in the 10-year history is the full year 2020, which included the negative impact of the COVID-19 pandemic on the global economy and our revenue.

We believe marketing expenditures over the long term have a high correlation to NGDP, notwithstanding the volatility of inflationary environments.

Based on our past performance, we also believe that our growth rate can exceed NGDP growth in the short-term in the markets we operate in, which are similar across our reporting units.

Accordingly, for our annual test as of May 1, 2024, we used an estimated long-term growth rate of 3.5%.

When performing the annual impairment test as of May 1, 2023 and estimating the future cash flows of our reporting units, we considered the current macroeconomic environment, as well as recent industry and market specific conditions.

When performing the annual impairment test as of May 1, 2024 and estimating the future cash flows of our reporting units, we considered the current macroeconomic environment, as well as industry and market specific conditions in 2024.

In the first half of 2024, our organic revenue increase was 4.6%, which excluded our net disposition activity and the impact from changes in foreign exchange rates.

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Goodwill Impairment Review - Conclusion

Based on the results of our impairment test, we concluded that our goodwill at May 1, 2023 was not impaired, because the fair value of each of our reporting units was in excess of its respective net book value.

Based on the results of our impairment test, we concluded that our goodwill as of May 1, 2024 was not impaired, because the fair value of each of our reporting units was in excess of its respective net book value.

For our reporting units with negative book value, we concluded that the fair value of their total assets was in excess of book value.

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The estimates used in our goodwill impairment test do not constitute forecasts or projections of future results of operations, but rather are estimates and assumptions based on historical results and assessments of macroeconomic factors affecting our reporting units as of the valuation date.

We believe that our estimates and assumptions are reasonable, but they are subject to change from period to period.

We believe that our estimates and assumptions are reasonable, but they are subject to change from year-over-year.

Actual results of operations and other factors will likely differ from the estimates used in our discounted cash flow valuation, and it is possible that differences could be significant.

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Revenue is recognized as the performance obligations are satisfied.

Our revenue is primarily derived from the planning and execution of advertising communications and marketing services in the following fundamental disciplines:

Advertising & Media, Precision Marketing, Commerce & Branding, Experiential, Execution & Support, Public Relations and Healthcare.

Our revenue is primarily derived from the planning and execution of advertising, marketing, and communications services in the following fundamental disciplines:

Media & Advertising, Precision Marketing, Public Relations, Healthcare, Branding & Retail Commerce, Experiential, and Execution & Support.

Our client contracts are primarily fees for service on a rate per hour or per project basis.

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In substantially all our businesses, we incur third-party costs on behalf of clients, including direct costs and incidental, or out-of-pocket costs.

Third-party direct costs incurred in connection with the creation and delivery of advertising or marketing communication services include, among others:

Third-party direct costs incurred in connection with the creation and delivery of advertising, marketing, and communications services include, among others:

purchased media, studio production services, specialized talent, including artists and other freelance labor, event marketing supplies, materials and services, promotional items, market research and third-party data and other related expenditures.

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However, the inclusion of billings related to third-party direct costs in revenue depends on whether we act as a principal or as an agent in the client arrangement.

In most of our businesses, including advertising, which also includes studio production efforts and media planning and buying services, public relations, healthcare advertising, precision marketing, commerce and branding, we act as an agent and arrange, at the client’s direction, for third parties to perform certain services.

In most of our businesses, including advertising, which also includes studio production efforts and media planning and buying services, precision marketing, public relations, healthcare, and branding and retail commerce, we act as an agent and arrange, at the client’s direction, for third parties to perform certain services.

In these cases, we do not control the goods or services prior to the transfer to the client.

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In such arrangements, we also take pricing risk under the terms of the client contract.

In certain specialty media buying businesses, we act as principal when we control the buying process for the purchase of the media and contract directly with the media vendor.

In certain media buying businesses, we act as principal when we control the buying process for the purchase of the media and contract directly with the media vendor.

In these arrangements, we assume the pricing risk under the terms of the client contract.

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NEW ACCOUNTING STANDARDS

See Note 24 to the consolidated financial statements for information on the adoption of new accounting standards and accounting standards not yet adopted.

See Notes 1 and 24 to the consolidated financial statements for information on the adoption of new accounting standards and accounting standards not yet adopted.

CONSOLIDATED RESULTS OF OPERATIONS

The period-over-period change in results of operations were:

Full Year 2023 v.

The year-over-year change in results of operations:

Year Ended December 31, 2024 vs.

2023 2023 vs.

2024 2023 2022 $ Change $ Change

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Interest Income 100.9 106.7 70.7 (5.8) 36.0

Income Before Income Taxes and Income From Equity Method Investments 1,992.9 1,945.4 1,988.8 47.5 (43.4)

Income Before Income Taxes and Income From Equity

Method Investments 2,127.6 1,992.9 1,945.4 134.7 47.5

Income Tax Expense 560.5 524.9 546.8 35.6 (21.9)

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Operating Margin % 14.5 % 14.3 % 14.6 % 0.2 % (0.3) %

EBITA $ 2,185.0 $ 2,163.6 $ 2,277.9 $ 21.4 $ (114.3)

$ 2,362.1 $ 2,166.5 $ 2,142.1 $ 195.6 $ 24.4

EBITA Margin % 15.1 % 14.7 % 15.0 % 0.4 % (0.3) %

1) For the year ended December 31, 2023, operating expenses included real estate operating lease impairment charges, severance, and other exit costs of $191.5 million ($145.5 million after tax) related to repositioning actions we took in the first and second quarters of 2023 to reduce our real estate requirements, rebalance our workforce, and consolidate operations in certain markets (see Note 13 to the consolidated financial statements).

The net aggregate impact of these items on Operating Income for the year ended December 31, 2023 was a reduction of $127.2 million ($102.6 million after tax).

The net aggregate effect of these items for the year ended December 31, 2023 to diluted net income per share - Omnicom Group Inc.

was a decrease of $0.50 (see Notes 13 and 14 to the consolidated financial statements).

1) Reconciliation of Non-GAAP Financial Measures on page 30 .

The net impact of these items reduced operating income for 2024 by $72.4 million ($56.0 million after-tax) and reduced diluted net income per share - Omnicom Group Inc.

The net impact of these items reduced operating income for 2023 by $127.2 million ($102.6 million after-tax) and reduced diluted net income per share - Omnicom Group Inc.

by $0.50 (see Notes 13 and 14 to the consolidated financial statements).

3) For the year ended December 31, 2022, operating expenses included $113.4 million of charges recorded in the first quarter of 2022, as well as an additional net income tax charge of $4.8 million, related to the disposition of our businesses in Russia, which reduced net income - Omnicom Group Inc.

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by $0.57 (see Note 15 to the consolidated financial statements).

3) For the year ended December 31, 2021, operating expenses were favorably impacted by the $50.5 million gain recorded in connection with the disposition in the Advertising & Media discipline.

The components of period-over-period revenue change in the United States (“Domestic”) and the remainder of the world (“International”) were:

4) Beginning in 2024, EBITA is defined as earnings before interest, income taxes and amortization of acquired intangible assets and internally developed strategic platform assets.

As a result, we reclassified the prior year to be consistent with the revised definition, which reduced EBITA from previously reported amounts.

We believe EBITA is useful in evaluating the impact of amortization of acquired intangible assets

and internally developed strategic platform assets on operating performance and allows for comparability between reporting periods.

The after-tax impact on diluted net income per share- Omnicom Group Inc.

for 2024, 2023 and 2022 was $0.32, $0.23 and $0.21, respectively.

The components of year-over-year revenue change in the United States (“Domestic”) and the remainder of the world (“International”):

Total Domestic International

Twelve Months Ended December 31, 2022

Year Ended December 31, 2023

$ 14,692.2 $ 7,471.6 $ 7,220.6

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Organic growth 768.7 5.2 % 509.6 6.8 % 259.1 3.6 %

Twelve Months Ended December 31, 2023

Year Ended December 31, 2024

$ 15,689.1 6.8 % $ 8,186.5 9.6 % $ 7,502.6 3.9 %

Total Domestic International

Twelve Months Ended December 31, 2021

Year Ended December 31, 2022

$ 14,289.1 $ 7,367.3 $ 6,921.8

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Organic growth 584.5 4.1 % 191.5 2.6 % 393.0 5.7 %

Twelve Months Ended December 31, 2022

Year Ended December 31, 2023

$ 14,692.2 2.8 % $ 7,471.6 1.4 % $ 7,220.6 4.3 %

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Changes in the value of foreign currencies against the U.S.

Dollar affect our results of operations and financial position.

Dollar affect our results of operations and financial condition.

For the most part, because the revenue and expense of our foreign operations are both denominated in the same local currency, the economic impact on operating margin is minimized.

Assuming exchange rates at February 1, 2024 remain unchanged, we expect the impact of changes in foreign exchange rates will be flat in the first quarter of 2024 and for the full year.

Based on our acquisition and disposition activity to date, we expect that the net impact will increase revenue by 1.50% in the first quarter of 2024 and 2.0% for the full year.

Assuming exchange rates at January 30, 2025, remain unchanged, we expect the impact of changes in foreign exchange rates to reduce revenue between 2.0% to 2.5% for the first quarter of 2025 and by 2.0% for the full year.

Based on our acquisition and disposition activity to date, excluding the proposed merger with IPG, we expect that the net impact will be flat for the first quarter and for the full year of 2025.

In the normal course of business, our agencies both gain and lose business from clients each year due to a variety of factors.

Under our client-centric approach, we seek to broaden our relationships with all of our clients.

Our largest client represented approximately 2.7% and 3.0% of revenue for 2024 and 2023, respectively.

Our ten largest and 100 largest clients represented approximately 19.1% and 54.4% of revenue for 2024, respectively, and 20.2% and 54.5% of revenue for 2023, respectively.

Revenue by Discipline

To monitor the changing needs of our clients and to further expand the scope of our services to key clients, we monitor revenue across a broad range of disciplines and group them into the following categories:

Advertising & Media, Precision Marketing, Commerce & Branding, Experiential, Execution & Support, Public Relations, and Healthcare.

The period-over-period change in revenue and organic growth by discipline was:

Media & Advertising, Precision Marketing, Public Relations, Healthcare, Branding & Retail Commerce, Experiential and Execution & Support,

The year-over-year change in revenue and organic growth by discipline:

Year Ended December 31,

2024 2023 2024 vs.

1 unchanged sentence

Revenue $ Change % Organic Growth

Advertising & Media $ 7,891.2 53.7 % $ 7,433.9 52.0 % $ 457.3 6.5 %

Media & Advertising $ 8,466.2 54.0 % $ 7,891.2 53.7 % $ 575.0 7.8 %

Precision Marketing 1,820.9 11.6 % 1,473.5 10.0 % 347.4 3.8 %

Commerce & Branding 853.7 5.8 % 848.1 5.9 % 5.6 1.2 %

Experiential 651.4 4.4 % 635.6 4.4 % 15.8 3.0 %

Execution & Support 880.8 6.0 % 1,069.9 7.5 % (189.1) (1.0) %

Public Relations 1,679.2 10.7 % 1,578.9 10.7 % 100.3 3.7 %

Healthcare 1,354.7 8.5 % 1,362.7 9.4 % (8.0) (0.4) %

Branding & Retail Commerce 792.9 5.1 % 853.7 5.8 % (60.8) (6.2) %

Experiential 731.5 4.7 % 651.4 4.4 % 80.1 15.4 %

Execution & Support 843.7 5.4 % 880.8 6.0 % (37.1) (0.5) %

Revenue $ 15,689.1 $ 14,692.2 $ 996.9 5.2 %

Year Ended December 31,

2023 2022 2023 vs.

1 unchanged sentence

Revenue $ Change % Organic Growth

Advertising & Media $ 7,433.9 52.0 % $ 7,966.2 55.7 % $ (532.3) 7.3 %

Media & Advertising $ 7,891.2 53.7 % $ 7,433.9 52.0 % $ 457.3 6.5 %

Precision Marketing 1,473.5 10.0 % 1,426.6 10.0 % 46.9 3.1 %

Commerce & Branding 848.1 5.9 % 802.2 5.6 % 45.9 11.7 %

Experiential 635.6 4.4 % 536.0 3.8 % 99.6 26.4 %

Execution & Support 1,069.9 7.5 % 1,115.9 7.8 % (46.0) 3.9 %

Public Relations 1,578.9 10.7 % 1,552.7 10.9 % 26.2 (0.8) %

Healthcare 1,362.7 9.4 % 1,322.3 9.3 % 40.4 3.8 %

Branding & Retail Commerce 853.7 5.8 % 848.1 5.9 % 5.6 1.2 %

Experiential 651.4 4.4 % 635.6 4.4 % 15.8 3.0 %

Execution & Support 880.8 6.0 % 1,069.9 7.5 % (189.1) (1.0) %

Revenue $ 14,692.2 $ 14,289.1 $ 403.1 4.1 %

Effective January 1, 2023, we realigned the classification of certain services primarily within our Commerce & Branding, Execution & Support, and Experiential disciplines, and prior year amounts have been reclassified.

In the normal course of business, our agencies both gain and lose business from clients each year due to a variety of factors.

Under our client-centric approach, we seek to broaden our relationships with all of our clients.

Our largest client represented 3.0% and 2.7% of revenue for 2023 and 2022, respectively.

Our ten largest and 100 largest clients represented 20.2% and 54.5% of revenue for 2023, respectively, and 19.1% and 53.1% of revenue for 2022, respectively.

The period-over-period change in worldwide revenue for 2023, in our fundamental disciplines was:

Organic revenue increased across substantially all of our disciplines, except for Public Relations, which faced a difficult comparison to the prior year, and Execution & Support.

The year-over-year changes in worldwide revenue in 2024, compared to 2023, in our fundamental disciplines were:

Worldwide organic revenue growth increased revenue $768.7 million, or 5.2%, primarily reflecting increased client spending in Media & Advertising, led by Media, as well as Precision Marketing, Public Relations and Experiential disciplines compared to the prior year.

Our Public Relations discipline was helped by spending on the U.S.

elections, and the Experiential discipline benefited from spending on the Summer Olympics.

Organic growth was partially offset by underperformance in our Branding & Retail Commerce discipline.

Changes in foreign exchange rates reduced revenue slightly.

The decrease in revenue from foreign exchange translation was primarily related to the weakening of some currencies, including the Japanese Yen and Brazilian Real against the U.S.

Dollar, partially offset by the strengthening of the British Pound, Colombian Peso and Euro against the U.S.

Acquisition revenue, net of dispositions, increased revenue $293.7 million, or 2.0% (see Notes 5 and 14 to the consolidated financial statements).

The year-over-year changes in worldwide revenue in 2023, compared to 2022, in our fundamental disciplines were:

Media & Advertising increased $457.3 million, Precision Marketing increased $46.9 million, Public Relations increased $26.2 million, Healthcare increased $40.4 million, Branding & Retail Commerce increased $5.6 million, Experiential increased $15.8 million, and Execution & Support decreased $189.1 million.

Organic revenue increased across substantially all disciplines, except for Public Relations, which faced a difficult comparison to the prior year, and Execution & Support.

The impact of foreign exchange translation slightly reduced our revenue.

The decrease in revenue from foreign exchange translation was primarily related to the weakening of several currencies against the U.S.

Dollar, including the Australian Dollar, Canadian Dollar, Japanese Yen, and Chinese Renminbi, partially offset by the Euro and British Pound, which strengthened against the U.S.

Dollar, including the Australian Dollar, Canadian Dollar, Japanese Yen, and

Chinese Renminbi, partially offset by the Euro and British Pound, which strengthened against the U.S.

Dollar compared to the prior year.

The changes in worldwide revenue in 2022, compared to 2021, in our fundamental disciplines was:

Advertising & Media decreased $532.3 million, Precision Marketing increased $221.4 million, Commerce & Branding increased $45.9 million, Experiential increased $99.6 million, Execution & Support decreased $46.0 million, Public Relations increased $154.5 million, and Healthcare increased $56.6 million.

Organic revenue increased across all disciplines.

The impact of foreign exchange translation decreased revenue period to period as substantially all foreign currencies weakened against the U.S.

Dollar, especially the British Pound and the Euro.

The decrease in revenue in our Advertising & Media discipline period to period was primarily the result of the disposition of our businesses in Russia.

The negative impact on revenue from acquisitions, net of dispositions, year-over-year was primarily due to dispositions in the Execution & Support discipline in the first and second quarters of 2023, including the sale of our research businesses, as well as the disposition of our businesses in Russia in the first quarter of 2022, partially offset by acquisitions in our Media & Advertising and Public Relations disciplines in 2023.

Revenue by Geography

The period-over-period change in revenue and organic growth in our geographic markets was:

The year-over-year change in revenue and organic growth in our geographic markets:

Year Ended December 31,

2024 2023 2024 vs.

7 unchanged sentences

Revenue $ 15,689.1 $ 14,692.2 $ 996.9 5.2 %

Year Ended December 31,

2023 2022 2023 vs.

7 unchanged sentences

Revenue $ 14,692.2 $ 14,289.1 $ 403.1 4.1 %

The period-over-period change in worldwide revenue across our geographic markets for 2023 was:

The year-over-year increase in worldwide revenue across our geographic markets for 2024 were:

North America $699.2 million, or 8.8%, Latin America $46.9 million, or 12.1%, Europe $172.1 million, or 4.0%, the Middle East and Africa $9.6 million, or 3.1%, and Asia-Pacific $69.1 million, or 3.9%.

The year-over-year change in worldwide revenue across our geographic markets for 2023 was:

North America increased $95.0 million, or 1.2%, Latin America increased $57.8 million, or 17.6%, Europe increased $256.4 million, or 6.4%, the Middle East and Africa decreased $37.1 million, or 10.7%, and Asia-Pacific increased $31.0 million, or 1.8%.

Organic revenue for 2023 increased across most countries within our major markets.

The period-over-period change in worldwide revenue across our geographic markets for 2022 was:

North America increased $146.3 million, or 1.9%, Latin America increased $32.9 million, or 11.1%, Europe decreased $209.1 million, or 5.0%, the Middle East and Africa increased $79.1 million, or 29.6%, and Asia-Pacific decreased $49.5 million, or 2.8%.

Organic revenue for 2022 increased across all countries within our major markets.

North America

Acquisitions net of dispositions negatively impacted revenue, primarily as a result of dispositions in the Execution & Support discipline in the first and second quarters of 2023, including the sale of our research businesses, partially offset by acquisitions during the year in the Advertising & Media, Precision Marketing, and Public Relations disciplines.

In North America, organic revenue increased across all our disciplines for 2022 compared to 2021, especially in our Advertising & Media, Precision Marketing and Public Relations disciplines, and was substantially offset by a reduction in acquisition revenue, net of disposition revenue, primarily due to the disposition in the Advertising & Media discipline in the second quarter of 2021.

Our Public Relations discipline was helped by spending on the U.S.

elections, and the Experiential discipline benefited from spending on the Summer Olympics.

The organic growth was partially offset by underperformance in our Branding & Retail Commerce, Execution & Support and Healthcare disciplines.

Acquisitions, net of dispositions, positively impacted revenue and were primarily related to the purchase of Flywheel Digital in January 2024 and acquisitions in the second half of 2023 in our Public Relations discipline, partially offset by dispositions in the Execution & Support discipline in the first half of 2023.

In 2023, North America’s organic revenue growth was driven primarily by the performance in the United States, especially in the Media & Advertising discipline, led by our media business, and our Precision Marketing, and Healthcare disciplines, partially offset by negative performance in our Experiential and Branding & Retail Commerce disciplines, which faced difficult comparisons to the prior year, and our Execution & Support discipline.

Acquisitions, net of dispositions, negatively impacted revenue, primarily as a result of dispositions in the Execution & Support discipline in the first and second quarters of 2023, including the sale of our research businesses, partially offset by acquisitions during the year in the Media & Advertising, Precision Marketing, and Public Relations disciplines.

Latin America

In Latin America, organic revenue for 2023 increased in all of our disciplines, led by our Advertising & Media discipline, and in substantially all countries in the region.

In Latin America, organic revenue growth in 2024 compared to the prior year, increased in all disciplines, led by Media & Advertising, and in all countries in the region.

The weakening of most currencies against the U.S.

Dollar decreased revenue in 2024, compared to 2023.

In Latin America, organic revenue growth in 2023 increased in all our disciplines, led by our Media & Advertising discipline, and in substantially all countries in the region.

The strengthening of most currencies, especially the Mexican Peso and Brazilian Real, partially offset by the weakening of the Argentine Peso against the U.S.

Dollar, increased revenue in 2023 compared to 2022.

In Latin America, organic revenue for 2022, increased in most countries in the region, especially Brazil and Colombia.

The increase in organic revenue was partially offset by negative performance in Mexico and the weakening of most currencies in the region against the U.S.

Foreign currency changes increased revenue for 2023, primarily as a result of the strengthening of the Euro and British Pound against the U.S.

Dollar period to period.

Dollar year-over-year.

In 2024, total revenue in the U.K.

increased 7.1% to $1,700.5 million.

Organic revenue growth year-over-year in the U.K.

was 2.7%, with growth led by our media business in our Media & Advertising discipline and our Experiential and Execution & Support disciples, partially offset by negative performance in our Precision Marketing, Branding & Retail Commerce, and Public Relations disciplines.

In Continental Europe, which includes the Euro Zone and the other European countries, organic growth year-over-year of 2.8% was across substantially all disciplines, led by Turkey, Spain, Germany and Netherlands, and was partially offset by weakness in France and Italy.

In Europe for 2023 compared to 2022, organic revenue increased across most countries in our major markets and in substantially all disciplines, especially our Media & Advertising discipline, led by our media business, and our Experiential discipline, partially offset by a decrease in our Public Relations discipline.

Foreign currency changes increased revenue in 2023, primarily as a result of the strengthening of the Euro and British Pound against the U.S.

Dollar year-over-year.

Acquisition revenue, net of disposition revenue, reduced revenue compared to the prior year, primarily due to the disposition of our businesses in Russia in the first quarter of 2022 and the disposition of certain businesses, primarily our research businesses in the Execution & Support discipline in the second quarter of 2023.

Total revenue in the U.K.

increased 4.0% in 2023 to $1,587.3 million.

Organic revenue growth period to period in the U.K.

was 4.7%, with growth across most disciplines, led by our media business in our Advertising & Media discipline, partially offset by negative performance in our Precision Marketing and Public Relations disciplines.

In Continental Europe, which includes the Euro Zone and the other European countries, organic growth period to period of 7.2% was led by Italy, France, and Germany across substantially all disciplines.

In Europe, organic revenue for 2022, increased in substantially all countries and in all disciplines, especially our Advertising & Media discipline, which was led by our media business, our Precision Marketing and Public Relations disciplines, and our Experiential discipline, as it continued to recover from the impact of the pandemic.

The increase in organic revenue was offset by the weakening of substantially all foreign currencies against the U.S.

Dollar, especially the British Pound and the Euro, as well as the disposition of our businesses in Russia in the first quarter of 2022.

In 2023, total revenue in the U.K.

increased 4.0% to $1,587.3 million.

Organic revenue growth year-over-year in the U.K.

was 4.7%, with growth across most disciplines, led by our media business in our Media & Advertising discipline, partially offset by negative performance in our Precision Marketing and Public Relations disciplines.

In Continental Europe, which includes the Euro Zone and the other European countries, organic growth year-over-year of 7.2% was led by Italy, France, and Germany across substantially all disciplines.

Middle East and Africa 2024 vs.

In the Middle East and Africa for 2023, organic revenue decreased compared to 2022, primarily as a result of our Experiential discipline, which faced difficult comparisons in the region, partially offset by our Advertising & Media discipline.

For 2023, the weakening of certain currencies in the region against the U.S.

Dollar also decreased revenue period to period.

For 2022 as compared to 2021, the increase in organic revenue was primarily related to the FIFA World Cup in the fourth quarter of 2022.

The organic revenue growth was partially offset by the weakening of certain foreign currencies against the U.S.

Dollar period to period, especially the Australian Dollar, Japanese Yen, and Chinese Renminbi.

In Asia-Pacific, organic revenue increased in most disciplines for 2022 compared to 2021, especially our Advertising & Media discipline, which was led by our media business, and in most of our major markets in the region, particularly Australia, India, Japan, and Korea.

The increase in organic revenue was offset by the weakening of all currencies in the region against the U.S.

Dollar and negative performance in our Experiential discipline, primarily caused by prolonged COVID-19 lockdowns in China.

In the Middle East and Africa for 2024, organic revenue increased compared to 2023, primarily as a result of our Media & Advertising and Experiential disciplines.

For 2024, the strengthening of certain currencies in the region against the U.S.

Dollar decreased revenue year-over-year.

For 2023, organic revenue decreased compared to 2022, primarily as a result of our Experiential discipline, which faced difficult comparisons in the region, partially offset by our Media & Advertising discipline.

In 2023 as compared to 2022, the weakening of certain currencies in the region against the U.S.

Dollar also decreased revenue year-over-year.

In Asia-Pacific, during 2024, organic revenue increased compared to 2023.

Organic growth in our Media & Advertising discipline was partially offset by underperformance in our Precision Marketing and Public Relations disciplines.

Substantially all markets in the region, especially China, India, Australia, the Philippines and Thailand, had positive organic revenue growth as compared to the prior year.

Foreign currency changes decreased revenue for the year, primarily as a result of the weakening of the Japanese Yen and Chinese Reminbi against the U.S.

Acquisition activity, including the purchase of Flywheel Digital in January 2024, increased revenue compared to the prior year.

Organic revenue for Asia-Pacific in 2023 increased compared to 2022 across most major markets in the region, especially China, India, Australia, and Japan, and was led by our media business in our Media & Advertising discipline and our Experiential discipline.

The organic revenue growth was partially offset by the weakening of certain currencies in the region against the U.S.

Dollar, especially the Australian Dollar, Japanese Yen and Chinese Renminbi.

Revenue by Industry

Revenue by type of client industry sector was:

Revenue by industry sector:

Year Ended December 31,

2024 2023 2022

2 unchanged sentences

Auto 12 % 12 % 12 %

Technology 8 % 11 % 11 %

Consumer Products 10 % 8 % 8 %

Technology 8 % 8 % 8 %

Financial Services 7 % 8 % 8 %

10 unchanged sentences

Operating Expenses

The period-over-period change in operating expenses was:

The year-over-year change in operating expenses:

Year Ended December 31,

2024 2023 2024 vs.

9 unchanged sentences

Real estate and other repositioning costs 57.8 0.4 % 191.5 1.3 % (133.7)

Charges arising from the effects of the war in Ukraine — — % 113.4 0.8 % (113.4)

Gain on disposition of subsidiary — — % (78.8) (0.5) % 78.8

4 unchanged sentences

Operating Income $ 2,274.6 14.5 % $ 2,104.7 14.3 % $ 169.9 8.1 %

Year Ended December 31,

2023 2022 2023 vs.

8 unchanged sentences

Occupancy and other costs 1,168.8 8.0 % 1,168.6 8.2 % 0.2 — %

Real estate and other repositioning costs 191.5 1.3 % — — % 191.5 — %

Charges arising from the effects of the war in Ukraine — — % 113.4 0.8 % (113.4)

9 unchanged sentences

Salary and service costs include employee compensation and benefits, freelance labor, third-party service costs, and third-party incidental costs.

Third-party service costs include vendor costs when we act as principal in providing services to our clients, and third-party incidental costs, which primarily consist of client-related travel and incidental out-of-pocket costs, which we bill back to the client directly at our cost and which we are required to include in revenue.

Third-party service costs include vendor costs when we act as principal in providing services to our clients.

Third-party incidental costs that are required to be included in revenue primarily consist of client-related travel and incidental out-of-pocket costs that are billed back to the client directly at our cost.

Occupancy and other costs consist of the indirect costs related to the delivery of our services, including office rent and other occupancy costs, equipment rent, technology costs, general office expenses and other expenses.

Adverse and beneficial fluctuations in foreign currencies from period to period impact our results of operations and financial position when we translate our financial statements from local foreign currencies to the U.S.

However, substantially all of our foreign operations transact business in their local currency, mitigating the impact of changes in foreign currency exchange rates on our operating margin percentage.

Operating expenses in 2023 increased 3.1% to $12,587.5 million from $12,205.8 million.

Included in operating expenses for 2023 is the net impact of the gain on disposition of certain research businesses in our Execution & Support discipline, of $78.8 million, repositioning costs related to real estate and other exit charges and severance costs of $191.5 million (see Notes 13 and 14 to the consolidated financial statements) and acquisition transaction costs of $14.5 million, primarily related to the Flywheel Digital acquisition that closed in January 2024.

The changes in our operating expenses period-over-period from foreign currency translation decreased slightly, in line with the percentage decrease in revenue from 2023 and 2022.

Operating expenses in 2022 increased $114.3 million, or 0.9%, to $12,205.8 million year-over-year.

Operating expenses for 2022 reflect charges arising from the effects of the war in Ukraine of $113.4 million.

Operating expenses in 2021 were favorably impacted by the $50.5 million gain recorded in connection with the disposition in the Advertising & Media discipline.

The weakening of most foreign currencies, especially the British Pound and Euro, against the U.S.

Dollar reduced operating expenses for 2022 as compared to the prior year, which was in line with the percentage reduction from changes in foreign currencies on revenue.

Adverse and beneficial fluctuations in foreign currencies from year-over-year impact our results of operations and financial condition when we translate our financial statements from local foreign currencies to the U.S.

However, substantially all of our foreign operations transact business in their local currency, mitigating the impact of changes in foreign currency exchange rates on our

operating margin percentage.

As a result, the changes in our operating expenses year-over-year from foreign currency translation were in line with the percentage impact from changes in foreign currencies on revenue for the year ended December 31, 2024.

Operating expenses in 2024 increased $827.0 million, or 6.6%, to $13,414.5 million from $12,587.5 million, compared to the prior year, primarily as a result of organic growth and the acquisition of Flywheel in the first quarter of 2024 (see Note 5 to the consolidated financial statements).

Operating expenses for 2024 include the impact of repositioning costs, primarily related to severance, recorded in the second quarter of 2024 for $57.8 million in connection with our strategic initiatives to increase efficiencies in our international operations and the start of the consolidation of our production services (see Note 13 to the consolidated financial statements).

Included in selling, general and administrative expenses in the fourth quarter of 2024 are acquisition transaction costs of $14.6 million ($13.1 million after-tax) related to the proposed merger with IPG (see Note 1 to the consolidated financial statements).

Operating expenses in 2023 increased $381.7 million, or 3.1%, to $12,587.5 million from $12,205.8 million.

Operating expenses for 2023 reflect the net impact of the gain on disposition of certain research businesses in our Execution & Support discipline of $78.8 million, repositioning costs related to real estate and other exit charges and severance costs of $191.5 million (see Notes 13 and 14 to the consolidated financial statements) and acquisition transaction costs of $14.5 million, primarily related to the Flywheel Digital acquisition that closed in January 2024.

Operating Expenses - Salary and Service Costs

Salary and service costs in 2023, which tend to fluctuate with changes in revenue, are comprised of salary and related costs, third-party service costs, and third-party incidental costs.

Salary and service costs for 2023 compared to the prior year period increased $375.3 million, or 3.6%, to $10,701.2 million.

Salary and service costs, which tend to fluctuate with changes in revenue, are comprised of salary and related costs, third-party service costs, and third-party incidental costs.

Salary and service costs for 2024 increased $731.3 million, or 6.8%, to $11,432.5 million, compared to the prior year.

Salary and related costs for 2024 increased $228.6 million, or 3.2%, to $7,441.4 million, primarily as a result of our acquisition of Flywheel Digital.

These costs decreased as a percentage of revenue, primarily due to the reduction in headcount arising from our ongoing repositioning actions and changes in our global employee mix.

Third-party service costs for 2024 increased $430.7 million, or 14.8%, to $3,348.6 million, primarily as a result of organic growth in our Media & Advertising and Experiential disciplines.

Third-party incidental costs for 2024 increased $72.0 million, or 12.6%, to $642.5 million.

Salary and service costs in 2023 compared to the prior year period increased $375.3 million, or 3.6% to $10,701.2 million.

Salary and related costs for 2023 increased $14.9 million, or 0.2%, to $7,212.8 million, primarily due to an increase in headcount.

Headcount increased for 2023 as a result of organic growth and our acquisition activity;

the increase was partially offset by the dispositions in our Execution & Support discipline in the first and

second quarters of 2023.

Third-party service costs for 2023 increased $332.4 million, or 12.9%, to $2,917.9 million due to changes in the mix of our businesses period to period, and were less impacted by the effects of our disposition activity during the year.

Headcount increased in 2023 as a result of organic growth and our acquisition activity;

the increase was partially offset by the dispositions in our Execution & Support discipline in the first and second quarters of 2023.

Third-party service costs for 2023 increased $332.4 million, or 12.9%, to $2,917.9 million due to changes in the mix of our businesses year-over-year, and were less impacted by the effects of our disposition activity during the year.

Third-party incidental costs for 2023 increased $28.0 million, or 5.2%, to $570.5 million.

Salary and service costs in 2022, decreased $76.1 million, compared to 2021, reflecting a decrease in third-party service costs of $393.6 million, partially offset by an increase in third-party incidental costs of $90.6 million and an increase in salary and related service costs of $226.9 million.

Third-party service costs decreased during the year primarily due to the disposition in the Advertising & Media discipline in the second quarter of 2021 and the disposition of our businesses in Russia in the first quarter of 2022.

The increase in salary and related service costs primarily resulted from the increase in organic revenue and an increase in headcount, as well as an increase in travel and related costs, reflecting the post-pandemic return to the office of our workforce in most markets.

Operating Expenses - Occupancy and Other Costs

Occupancy and other costs for 2023, which are less directly linked to changes in revenue than salary and service costs, decreased slightly by $0.2 million year-over-year.

Lower rent expense was partially offset by an increase in other occupancy costs in the year.

In connection with the transition to a flexible working environment, a hybrid model which allows for partial remote work, we took certain actions in the first quarter of 2023 to reduce and reposition our office lease portfolio and recorded a charge of $119.2 million, which included an $80.4 million non-cash impairment charge for operating lease right-of-use, or ROU, assets, $20.0 million for the write-off of the net book value of leasehold improvements at the affected locations, and $18.8 million of other lease obligations that will be paid in less than one year.

Substantially all of the operating lease payments related to the ROU assets will be paid out over three years (see Note 13 to the consolidated financial statements).

Occupancy and other costs for 2022 increased $20.4 million year-over-year, primarily due to an increase in general office expenses and other costs, resulting from the return of our workforce to the office, partially offset by lower rent and other occupancy costs.

Occupancy and other costs are less directly linked to changes in revenue than salary and service costs.

Occupancy and other costs for 2024, increased by $105.6 million, or 9.0%, year-over-year to $1,274.4 million, primarily resulting from acquisition activity.

Increased office and other related costs were partially offset by lower rent expense in the year.

Occupancy and other costs for 2023, increased slightly by $0.2 million year-over-year.

Lower rent expense was partially offset by an increase in office and other related costs in the year.

Substantially all of the operating lease payments related to the ROU assets will be paid out through December 31, 2026 (see Note 13 to the consolidated financial statements).

Operating Expenses - Selling, General & Administrative Expenses

SG&A expenses primarily consist of third-party marketing costs, professional fees, and compensation and benefits and occupancy and other costs of our corporate and executive offices, including group-wide finance and accounting, treasury, legal and governance, human resource oversight and similar costs.

SG&A expenses for 2023 compared to 2022 increased by $15.2 million, primarily as a result of higher professional fees in connection with our acquisition activity during the year, including the Flywheel Digital acquisition, which closed in January 2024.

SG&A expenses for 2022 compared to 2021 were flat.

SG&A expenses for 2024 increased $14.4 million compared to 2023, primarily due to professional fees related to our strategic initiatives.

SG&A expenses for 2023 increased $15.2 million compared to 2022, primarily as a result of higher professional fees in connection with our acquisition activity during the year, and acquisition transaction costs of $14.5 million ($13.0 million after-tax), primarily related to the Flywheel Digital acquisition that closed in January 2024.

Operating Income

Operating income for 2024 increased $169.9 million, or 8.1%, to $2,274.6 million, compared to 2023, and operating margin increased to 14.5% from 14.3%.

EBITA increased $195.6 million to $2,362.1 million, and EBITA margin increased to 15.1% from 14.7%.

The net effect of repositioning actions, primarily related to severance, recorded in the second quarter of 2024 and acquisition transaction costs recorded in the fourth quarter of 2024 (see Note 13 to the consolidated financial statements) reduced both operating income and EBITA by $72.4 million, and reduced both operating margin by 0.5% and EBITA margin by 0.4%.

The net effect of the real estate and other repositioning costs, the gain on disposition of subsidiaries (see Notes 13 and 14 to the consolidated financial statements) and acquisition costs, reduced both operating income and EBITA by $127.2 million, and reduced both operating margin and EBITA margin by 0.9% in 2023.

Operating income for 2023 compared to 2022, increased $21.4 million to $2,104.7 million and operating margin decreased to 14.3% from 14.6%.

EBITA decreased $24.4 million to $2,166.5 million and EBITA margin decreased to 14.7% from 15.0%.

In 2023, the effect of the real estate and other repositioning costs, the gain on disposition of subsidiaries (see Notes 13 and 14 to the audited consolidated financial statements) and acquisition transaction costs, reduced both operating income and EBITA by $127.2 million, and reduced operating margin by 0.9% and EBITA margin by 0.8%.

Operating income and EBITA in 2022 included a reduction of $113.4 million related to the war in Ukraine (see Note 15 to the consolidated financial statements), which decreased both operating margin and EBITA margin by 0.8%.

Operating income decreased $114.6 million to $2,083.3 million, operating margin decreased to 14.6% from 15.4%, and EBITA margin decreased to 15.1% from 15.9%.

Operating profit, operating margin and EBITA margin for 2022 were negatively impacted by the $113.4 million charges arising from the effects of the war in Ukraine.

Operating profit, operating margin and EBITA margin for 2021 were favorably impacted by the $50.5 million gain recorded in connection with dispositions in the Advertising & Media discipline.

Operating income and EBITA in 2022 included a reduction of $113.4 million related to charges arising from the war in Ukraine, which decreased both operating margin and EBITA margin by 0.8%.

Net Interest Expense

Net interest expense in 2024 increased $35.2 million year-over-year to $147.0 million.

Interest expense on debt increased by $31.2 million year-over-year, primarily related to the issuance in the first quarter of 2024 of €600 million 3.70% Senior Notes due 2032, or 2032 Notes, and the issuance in the third quarter of 2024 of $600 million 5.30% Senior Notes due 2034, or 2034 Notes.

The net proceeds from the issuance of the 2032 Notes were used for general corporate purposes, including working capital expenditures, acquisitions and repurchases of our common stock.

The net proceeds from the issuance of the 2034 Notes, along with available cash, were used to fund the repayment of our $750 million 3.65% Senior Notes on November 1, 2024 (see Note 7 to the consolidated financial statements).

Interest income in 2024 decreased $5.8 million year-over-year to $100.9 million, primarily as a result of lower cash balances in the first half of the year due to the timing of our financing and acquisition activity, including the purchase of Flywheel in the first quarter of 2024.

Net interest expense in 2023 decreased $26.1 million year-over-year to $111.8 million.

Interest expense increased by $9.9 million year-over-year, primarily related to non-cash interest charges on pension and other postemployment benefits (see Note 12 to the consolidated financial statements).

Interest income in 2023 increased $36.0 million year-over-year to $106.7 million, primarily as a result of higher interest rates on cash balances.

Looking ahead we expect net interest expense to increase in 2024, primarily as a result of lower average cash balances resulting from the funding of the Flywheel Digital purchase, with cash on-hand in January 2024, as well as the expectation of lower investing rates overall.

Net interest expense in 2022 decreased $71.2 million year-over-year to $137.9 million.

Interest expense on debt decreased $21.9 million to $191.3 million in 2022 compared to 2021, primarily as a result of the benefit from the early redemption in May 2021 of all the outstanding $1.250 billion 3.625% Senior Notes due 2022, or 2022 Notes, which was partially offset by the issuance of the 2.60% Senior Notes due 2031 in May 2021, and the issuance of the £325 million 2.25% Senior Notes due 2033 in November 2021.

Interest expense for 2021 includes a loss of $26.6 million on the early redemption of the 2022 Notes.

Interest income in 2022 increased $43.4 million to $70.7 million year-over-year, primarily as a result of higher interest rates on our cash balances and our short-term investments.

Our effective tax rate for 2023 decreased period-over-period to 26.3% from 28.1%.

Looking ahead to 2024 we expect our tax rate to increase to 27% primarily related to increases in the statutory rates of certain international markets.

The Inflation Reduction Act of 2022, or IRA, levies a 1% excise tax on net stock repurchases after December 31, 2022.

The excise tax is recorded as a cost of acquiring treasury stock and is not material.

Additionally, the IRA imposes a 15% corporate alternative minimum tax, or CAMT, for tax years beginning after December 31, 2022.

The CAMT is not expected to have a material impact on our results of operations or financial position.

Numerous foreign jurisdictions have enacted or are in the process of enacting legislation to adopt a minimum effective tax rate described in the Global Anti-Base Erosion, or Pillar Two, model rules issued by the Organization for Economic Co-operation and Development, or OECD.

Interest income in 2023 increased $36.0 million year-over-year to 106.7 million, primarily as a result of higher average cash balances.

Our effective tax rate for 2024 remained flat year-over-year at 26.3%.

The effective tax rate for 2024 was favorably impacted by the windfall tax benefit on share-based compensation.

The effective tax rate for 2023 includes an increase of approximately $10.7 million in income tax expense related to a lower tax benefit in certain jurisdictions for the real estate and other repositioning costs in the period and an increase in the U.K.

statutory tax rate, partially offset by approximately $10.0 million of favorable impacts from the resolution of certain non-U.S.

tax positions.

Our effective tax rate for 2023 decreased year-over-year to 26.3% from 28.1%.

A minimum effective tax rate of 15% would apply to multinational companies with consolidated revenue above €750 million.

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We are continuing to monitor the pending implementation of Pillar Two by individual countries and the potential effects of Pillar Two on our business.

We do not expect the provisions effective in 2024 will have a materially adverse impact on our results of operations, financial position or cash flows.

Our effective tax rate for 2022 increased year-over-year to 28.1% from 24.6%.

The higher effective tax rate for 2022 was predominantly the result of the non-deductibility of the $113.4 million charge recorded in the first quarter of 2022, arising from the effects of the war in Ukraine, as well as an additional increase in income tax expense of $4.8 million related to the disposition of our businesses in Russia.

These charges were partially offset by the tax benefit arising from our share-based compensation awards.

The effective tax rate for 2021 reflects a nominal tax applied to the book gain on the disposition in the Advertising & Media discipline resulting from the excess of tax over book basis and a reduction in income tax expense of $32.8 million, primarily related to the favorable settlements of uncertain tax positions in certain jurisdictions.

The provisions effective in 2024 did not have a materially adverse impact on our results of operations, financial condition or cash flows.

Net Income and Net Income Per Share - Omnicom Group, Inc.

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Diluted net income per share - Omnicom Group Inc.

increased to $6.91 in 2023, from $6.36 in 2022, due to the factors described above and the impact of the reduction in our weighted average common shares outstanding resulting from the repurchases of our common stock, net of shares issued for stock option exercises and the employee stock purchase plan during the year.

For 2023, the net impact of the real estate repositioning costs, gain on disposition of subsidiaries and acquisition transaction costs reduced net income - Omnicom Group Inc.

increased to $7.46 in 2024, from $6.91 in 2023, due to the factors described above and the impact of the reduction in our weighted average common shares outstanding resulting from the repurchases of our common stock, net of shares issued for restricted stock awards, stock option exercises and the employee stock purchase plan during the year.

For 2024, the net impact of the real estate and other repositioning costs, primarily related to severance, recorded in the second quarter of 2024 (see Note 13 to the consolidated financial statements) and acquisition transaction costs, recorded in the fourth quarter of 2024 reduced net income - Omnicom Group Inc.

by $56.0 million and diluted net income per share - Omnicom Group Inc.

Net income - Omnicom Group Inc.

in 2022 decreased $91.3 million to $1,316.5 million from $1,407.8 million in 2021.

The year-over-year decrease is due to the factors described above.

in 2023 increased $74.9 million to $1,391.4 million from $1,316.5 million.

The year-over-year increase is due to the factors described above.

Diluted net income per share - Omnicom Group Inc.

decreased to $6.36 in 2022, compared to $6.53 in 2021, due to the factors described above, partially offset by the impact of the reduction in our weighted average common shares outstanding resulting from repurchases of our common stock, net of shares issued for restricted stock awards, stock option exercises and the employee stock purchase plan during the year.

The impact of the after-tax charges arising from the effect of the war in Ukraine reduced net income - Omnicom Group Inc.

for 2022 by $118.2 million and diluted net income per share - Omnicom Group Inc.

The combined effect of the after-tax gain on the disposition in the Advertising & Media discipline and the loss on the early redemption of the 2022 Notes increased net income - Omnicom Group Inc.

in 2021 by $31.0 million and increased diluted net income per share - Omnicom Group Inc.

decreased to $6.91 in 2023, compared to $6.36 in 2022, due to the factors described above and the impact of the reduction in our weighted average common shares outstanding resulting from repurchases of our common stock, net of shares issued for restricted stock awards, stock option exercises and the employee stock purchase plan during the year.

For 2023, the net impact of the real estate and other repositioning costs (see Note 13 to the consolidated financial statements), gain on disposition of subsidiaries (see Note 14 to the consolidated financial statements) and acquisition transaction costs reduced net income - Omnicom Group Inc.

by $102.6 million and diluted net income per share - Omnicom Group Inc.

NON-GAAP FINANCIAL MEASURES

We use certain non-GAAP financial measures in describing our performance.

We use EBITA and EBITA Margin as additional operating performance measures, which exclude the non-cash amortization expense of intangible assets (primarily consisting of amortization of intangible assets arising from acquisitions).

We define EBITA as earnings before interest, taxes, and amortization of intangible assets, and EBITA margin as EBITA divided by revenue.

We believe EBITA and EBITA Margin are useful measures for investors to evaluate the performance of our business.

We use EBITA and EBITA Margin as additional operating performance measures, which exclude from operating income the non-cash amortization expense of acquired intangible assets and internally developed strategic platform assets.

We believe EBITA and EBITA Margin are useful measures for investors to evaluate the performance of our business and allow for comparability between the periods presented.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with U.S.

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to EBITA and EBITA Margin:

Year Ended December 31,

2024 2023 2022

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Operating Income 2,274.6 2,104.7 2,083.3

Amortization of intangible assets 80.3 80.3 80.0

Amortization of acquired intangible assets and

internally developed strategic platform assets 87.5 61.8 58.8

Earnings before interest, taxes, and amortization of intangible assets (“EBITA”) $ 2,362.1 $ 2,166.5 $ 2,142.1

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Cash Sources and Requirements

Primary sources of short-term liquidity are net cash provided by operating activities and cash and cash equivalents.

Additional liquidity sources include our $2.5 billion unsecured multi-currency revolving credit facility, or Credit Facility, the ability to issue up to $2 billion of U.S.

The primary sources of our short-term liquidity are net cash provided by operating activities and cash and cash equivalents.

Additional liquidity sources include our $2.5 billion unsecured multi-currency revolving credit facility, or Credit Facility, terminating on June 2, 2028, the ability to issue up to $2 billion of U.S.

Dollar denominated commercial paper and issue up to the equivalent of $500 million in British Pounds or Euro under a Euro commercial paper program, and access to the capital markets.

In June 2023, we amended the Credit Facility to, among other things, extend its termination date to June 2, 2028, and transition the benchmark rate for U.S.

Dollar denominated loans from LIBOR to the Secured Overnight Financing Rate, or SOFR.

In addition, certain of our international subsidiaries have uncommitted credit lines that are guaranteed by Omnicom aggregating $517.4 million.

Our liquidity sources fund our non-discretionary cash requirements and our discretionary spending.

On January 3, 2024, we entered into a Delayed Draw Term Loan Agreement, or Term Loan Facility, that provides for a delayed-draw term loan up to an aggregate principal amount of $600 million (see Note 7 to the consolidated financial statements).

Our $600 million Delayed Draw Term Loan Agreement automatically terminated on July 15, 2024.

Working capital, which we define as current assets minus current liabilities, is our principal non-discretionary funding requirement.

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Our principal discretionary cash spending includes dividend payments to common shareholders, capital expenditures, strategic acquisitions and repurchases of our common stock.

On January 2, 2024 , we acquired Flywheel Digital for a net cash purchase price of approximately $845 million (see Note 5 to the consolidated financial statements).

We expect growth investment in Flywheel Digital and other technologies to increase our capital expenditures for 2024 compared to the prior year, which we will fund from operating cash flow.

Cash and cash equivalents increased $150.2 million from December 31, 2022.

The increase was composed of:

Cash and cash equivalents decreased $92.6 million from December 31, 2023.

The decrease was composed of:

Net cash provided by operating activities - as reported $ 1,733.5

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Principal cash uses $ (2,045.4)

Principal cash sources in excess of principal cash uses 389.0

Principal cash uses in excess of principal cash sources $ (80.7)

Effect of foreign exchange rate changes on cash and cash equivalents (185.4)

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Decrease in operating capital (231.2)

Increase in cash and cash equivalents - as reported $ 150.2

Decrease in cash and cash equivalents - as reported $ (92.6)

Principal cash sources and principal cash uses are Non-GAAP liquidity measures.

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At December 31, 2024, we have the following contractual obligations:

• Outstanding fixed-rate debt maturing at various times with an aggregate principal amount of $5.7 billion, of which $750 million is due in 2024.

Depending on the conditions in the credit markets, we may refinance this debt, or we may use cash from operations and temporarily access our Credit Facility or Term Loan Facility, to repay this debt.

Future interest payments on our debt total $716.7 million, of which $155.4 million is payable in 2024.

• The liability for our operating and finance lease payments is $1,492.5 million, of which $309.3 million is due in 2024.

• The obligation for our defined benefit pension plans is $224.3 million, and the liability for our postemployment arrangements is $142.2 million.

In 2023, we contributed $8.8 million to our defined benefit plans and paid $10.9 million for our postemployment arrangements.

• The aggregate principal amount of long-term debt is $6.1 billion and matures at various dates from 2026 through 2034.

Future interest payments on the debt total $1.0 billion, of which $186.6 million is payable in 2025.

• The liability for operating and finance lease payments is $1,414.9 million, of which $294.2 million is due in 2025.

• The obligation for the defined benefit pension plans is $216.0 million, and the liability for the postemployment arrangements is $126.6 million.

In 2024, we contributed $10.6 million to the defined benefit plans and paid $11.4 million for the postemployment arrangements.

We do not expect these payments to increase significantly in 2025.

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Based on past performance and current expectations, we believe that net cash provided by operating activities and cash and cash equivalents will be sufficient to meet our non-discretionary cash requirements for the next twelve months.

In addition, and over the longer term, our Credit Facility and Term Loan Facility are available to fund our working capital and contractual obligations.

In addition, and over the longer term, our Credit Facility is available to fund our working capital and contractual obligations.

Cash Management

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Additionally, under the terms of the arrangement, set-off of foreign exchange positions are limited to the long and short positions within their own account.

To the extent that our treasury centers require liquidity, they have the ability to issue up to a total of $2 billion of U.S.

Dollar-denominated commercial paper and issue up to the equivalent of $500 million in British Pounds or Euro under a Euro commercial paper program, or borrow under the Credit Facility or the uncommitted credit lines.

To the extent that our treasury centers require liquidity, they can issue up to a total of $2 billion of U.S.

Dollar-denominated commercial paper, issue up to the equivalent of $500 million in British Pounds or Euro under a Euro commercial paper program, or borrow under the Credit Facility or the uncommitted credit lines.

This process enables us to manage our debt more efficiently and utilize our cash more effectively, as well as manage our risk to foreign exchange rate imbalances.

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In countries where we conduct treasury operations, generally the counterparties are either branches or subsidiaries of institutions that are party to the Credit Facility.

These institutions generally have credit ratings equal to or better than our credit ratings.

These institutions generally have credit ratings better than or equal to our credit ratings.

In countries where we do not conduct treasury operations, all cash and cash equivalents are held by counterparties that meet specific minimum credit standards.

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Substantially all of the cash is available to us, net of any foreign withholding taxes payable upon repatriation to the United States.

Our net debt position as of December 31, 2023, which we define as total debt, including short-term debt, less cash and cash equivalents and short-term investments decreased $33.1 million to $1.2 billion from December 31, 2022.

The decrease in net debt primarily resulted from an increase in cash from net cash provided by operating activities of $1.4 billion, and the proceeds from the disposition of subsidiaries and other investing activities of $190 million, which is included in net cash provided by investing activities.

These increases were substantially offset by our discretionary spending of $1.5 billion, primarily consisting of our financing and acquisition activities.

As of December 31, 2024, our net debt position, which we define as total debt, including short-term debt, less cash and cash equivalents increased $498.7 million to $1.7 billion from December 31, 2023.

The increase in net debt primarily resulted from our discretionary spending of $2.0 billion, primarily related to our acquisition and other financing activities.

This increase was substantially offset by the increase in cash from the net cash provided by operating activities of $1.7 billion.

In addition, the net effect of foreign exchange rate changes on cash and cash equivalents and on our foreign currency denominated debt increased net debt by $114 million.

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Total debt 6,056.6 5,650.5

Cash and cash equivalents and short-term investments 4,432.0 4,342.5

Cash and cash equivalents 4,339.4 4,432.0

Net debt $ 1,717.2 $ 1,218.5

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Debt Instruments and Related Covenants

Our 2.45% Senior Notes due 2030, 4.20% Senior Notes due 2030 and 2.60% Senior Notes due 2031 are senior unsecured obligations of Omnicom that rank equal in right of payment with all existing and future unsecured senior indebtedness.

Omnicom and its wholly owned finance subsidiary, Omnicom Capital Inc., or OCI, are co-obligors under the 3.65% Senior Notes due 2024 and the 3.60% Senior Notes due 2026.

On August 2, 2024, Omnicom issued $600 million 5.30% Senior Notes due 2034.

The net proceeds from the issuance, after deducting the underwriting discount and offering expenses, were $592.4 million.

The net proceeds from the issuance, along with available cash, were used to fund the repayment of our $750 million 3.65% Senior Notes on November 1, 2024.

On March 6, 2024, Omnicom Finance Holdings plc, or OFH, a U.K.-based wholly owned subsidiary of Omnicom, issued €600 million 3.70% Senior Notes due 2032.

The net proceeds from the issuance, after deducting the underwriting discount and offering expenses, were $643.1 million and were used for general corporate purposes, including working capital expenditures, acquisitions and repurchases of our common stock.

Our 2.45% Senior Notes due 2030, 4.20% Senior Notes due 2030, 2.60% Senior Notes due 2031 and 5.30% Senior Notes due 2034 are senior unsecured obligations of Omnicom that rank equal in right of payment with all existing and future unsecured senior indebtedness.

Omnicom and its wholly owned finance subsidiary, Omnicom Capital Inc., or OCI, are co-obligors under the 3.60% Senior Notes due 2026.

These notes are a joint and several liability of Omnicom and OCI, and Omnicom unconditionally guarantees OCI’s obligations with respect to the notes.

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Such notes are senior unsecured obligations that rank equal in right of payment with all existing and future unsecured senior indebtedness.

Omnicom and OCI have, jointly and severally, fully and unconditionally guaranteed the obligations of Omnicom Finance Holdings plc, or OFH, a U.K.-based wholly owned subsidiary of Omnicom, with respect to the €500 million 0.80% Senior Notes due 2027 and the €500 million 1.40% Senior Notes due 2031, collectively the Euro Notes.

Omnicom and OCI have, jointly and severally, fully and unconditionally guaranteed the obligations of OFH with respect to the €500 million 0.80% Senior Notes due 2027 and the €500 million 1.40% Senior Notes due 2031, and Omnicom has fully and unconditionally guaranteed the obligations of OFH with respect the €600 million 3.70% Senior Notes due 2032, collectively the Euro Notes.

OFH’s assets consist of its investments in several wholly owned finance companies that function as treasury centers, providing funding for various operating companies in Europe, Australia and other countries in the Asia-Pacific region.

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There are no restrictions on the ability of Omnicom, OCI or OFH to obtain funds from their subsidiaries through dividends, loans or advances.

The Euro Notes and the related guarantees are senior unsecured obligations that rank equal in right of payment with all existing and future unsecured senior indebtedness of OFH and each of Omnicom and OCI, respectively.

Omnicom has fully and unconditionally guaranteed the obligations of Omnicom Capital Holdings plc, or OCH, a U.K.-based wholly owned subsidiary of Omnicom, with respect to the Sterling Notes.

Omnicom has fully and unconditionally guaranteed the obligations of Omnicom Capital Holdings plc, or OCH, a U.K.-based wholly owned subsidiary of Omnicom, with respect to the £325 million 2.25% Senior Notes due 2033, or Sterling Notes.

OCH’s assets consist of its investments in several wholly owned finance companies that function as treasury centers, providing funding for various operating companies in EMEA, Australia and other countries in the Asia-Pacific region.

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The Sterling Notes and the related guarantee are senior unsecured obligations that rank equal in right of payment with all existing and future unsecured senior indebtedness of OCH and Omnicom, respectively.

The Credit Facility contains a financial covenant that requires us to maintain a Leverage Ratio of consolidated indebtedness to consolidated EBITDA (earnings before interest, taxes, depreciation, amortization and non-cash charges) of no more than 3.5 times for the most recently ended 12-month period.

The Credit Facility has a financial covenant that requires us to maintain a Leverage Ratio of consolidated indebtedness to consolidated EBITDA (earnings before interest, taxes, depreciation, amortization and non-cash charges) of no more than 3.5 times for the most recently ended 12-month period.

At December 31, 2024, we were in compliance with this covenant as our Leverage Ratio was 2.4 times.

Neither the Credit Facility nor the Term Loan Facility limits our ability to declare or pay dividends or repurchase our common stock.

The Credit Facility does not limit our ability to declare or pay dividends or repurchase our common stock.

At December 31, 2024, our long-term and short-term debt was rated BBB+ and A2 by S&P and Baa1 and P2 by Moody's.

Our access to the commercial paper market and the cost of these borrowings are affected by market conditions and our credit ratings.

The long-term debt indentures, Credit Facility and Term Loan Facility do not contain provisions that require acceleration of cash payments in the event of a downgrade in our credit ratings.

Our access to the commercial paper market and the cost of any issuances is affected by market conditions and our credit ratings.

The long-term debt indentures and the Credit Facility do not contain provisions that require acceleration of cash payments in the event of a downgrade in our credit ratings.

Credit Markets and Availability of Credit

In light of the uncertainty of future economic conditions, we will continue to take actions available to us to respond to changing economic conditions and will continue to manage our discretionary expenditures.

In light of the uncertainty of future economic conditions, we will continue to take actions available to us to respond to changing economic conditions, and we will manage our discretionary expenditures.

We will also continue to monitor and manage the level of credit made available to our clients.

We believe that these actions, in addition to the availability of our Credit Facility and Term Loan Facility, are sufficient to fund our near-term working capital needs and our discretionary spending.

Information regarding our Credit Facility and Term Loan Facility is provided in Note 7 to the consolidated financial statements.

We have the ability to fund our day-to-day liquidity, including working capital, by issuing commercial paper or borrowing under the Credit Facility and Term Loan Facility.

During 2021 and 2022, we did not issue commercial paper.

For the year ended December 31, 2023, the maximum amount of commercial paper issued was $200 million, the average amount outstanding was $5.1 million, the average days outstanding were 1.7 days, and the weighted average interest rate was 5.24%.

We believe that these actions, in addition to the availability of our Credit Facility, are sufficient to fund our near-term working capital needs and our discretionary spending.

Information regarding our Credit Facility is provided in Note 7 to the consolidated financial statements.

We have the ability to fund our day-to-day liquidity, including working capital, by issuing commercial paper or borrowing under the Credit Facility.

We did not issue commercial paper in 2024.

In 2023, we had a maximum of $200 million of commercial paper outstanding during the year, the average amount outstanding was $5.1 million, the average days outstanding were 1.7 days, and the weighted average interest rate was 5.24%.

At December 31, 2024, there were no outstanding borrowings under the Credit Facility and no outstanding commercial paper issuances.

We may issue commercial paper to fund our day-to-day liquidity when needed.

However, disruptions in the credit markets may lead to periods of illiquidity in the commercial paper market and higher credit spreads.

To mitigate any disruption in the credit markets and to fund our liquidity, we may borrow under the Credit Facility and Term Loan Facility or the uncommitted credit lines or access the capital markets if favorable conditions exist.

To mitigate any disruption in the credit markets and to fund our liquidity, we may borrow under the Credit Facility or the uncommitted credit lines or access the capital markets if favorable conditions exist.

We will continue to monitor closely our liquidity and conditions in the credit markets.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis